US Stocks Move Off Lows But Remain in Red in Choppy Trading
New York (Sept 23) Stocks slumped by midday Wednesday after struggling for gains for much of the morning.
The S&P 500 was down 0.5%, the Dow Jones Industrial Average fell 0.61%, and the Nasdaq slid 0.38%.
U.S. manufacturing in September grew at its slowest pace since October 2013. The flash Markit manufacturing index recorded an unchanged reading of 53 as manufacturers dealt with a stronger dollar and weaker global demand.
Volkswagen (VLKAY) CEO Martin Winterkorn resigned on Wednesday in the wake of a massive emissions scandal. The shares were higher after two days of steep losses. The automaker had admitted that more than 11 million diesel vehicles had software that gamed emissions tests. Shares have now fallen 55% from a March peak.
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Asian markets ended deep in the red on Wednesday after fresh data on China's factory sector underscored fears of a slowdown. Factory activity in China dropped to its lowest level since March 2009 -- a reading of 47 in September fell below estimates of 47.5, according to the preliminary Caixin China manufacturing PMI. China's Shanghai Composite fell 2.2%.
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Manufacturing activity in Europe also showed signs of weakness. A reading of 53.9 in September fell short of forecasts, according to the Markit Eurozone Manufacturing PMI. However, growth in new orders jumped to a five-month high, a positive sign of likely improvement in the overall manufacturing sector in coming months.
Signs of economic weakness outside of the U.S. continue to take center stage after the Federal Reserve cited global forces as reason to delay a rate hike at its meeting last week.
"Increased uncertainty continues to leave the Fed's decision making function more opaque, increasing market volatility as investors react to any further news of slowing global growth momentum," said TD Securities' Gennadiy Goldberg.
Crude oil prices fell back from earlier highs by the middle of the session. West Texas Intermediate fell 1.6% to $45.61 a barrel. The Energy Information Administration recorded a decline in weekly inventories. Crude stocks fell by 1.9 million barrels over the week ended September 18, more than double an estimated drop of 700,000.
Profit-takers stormed the markets on Tuesday, pulling stocks deep into the red on fears over China's economy. Concerns over the world's second-largest economy hit commodities hard with investors fearful over what impact a slowdown would have on demand for oil and materials.
MetLife (MET - Get Report) shares were on watch after the company increased its repurchase authorization to $1 billion as management argued additional capital should be returned to shareholders. MetLife completed a $1 billion share buyback program announced at the end of last year.
J.C. Penney (JCP - Get Report) named John Tighe as its new chief merchant officer, replacing Elizabeth Sweeney who has held the role for nearly four years. The new role is key in monitoring sales and inventory levels.
Cisco (CSCO - Get Report) is edging closer to announcing a partnership with Chinese server maker Inspur Group, a move to make in-roads in the Chinese market. Cisco has suffered steep declines in revenue out of China in recent years. An announcement is expected during Chinese President Xi Jinping's visit to Seattle on Wednesday, according to The Wall Street Journal.
Source: TheStreet
